16 July 2013: Nifty Elliott wave analysis: RBI’s step will be disastrous for equity price. They handle one problem to give a birth of next problem. Technical support – 5960-5910.
You must
read previous articles and watch the given chart carefully to understand this
article completely.
For 16
July 2013: -
On 15 July
2013, FII Sold INR 227.25 crs and DII bought INR 454.28 crs.
FIIs are
not looking confident on Indian market. They are giving preference to the
developed market over emerging market. It can be sad that emerging market has
better valuation than developed one but it is currency which is turning as
deciding factor. Nifty stand above 6000 marks and it is itself a big thing.
Now Indian
market needs a trigger of reform which can convince FII for their investment in
India. Most important step will be bank rate cut but RBI governor keep on
issuing adverse remark to give a jerk to the market. One such remark came last
night too. We need to understand that India is struggling on food inflation
which cannot be handled by rate cut. This is the reason that inflation remains
higher in past four years. It is a big failure of RBI. Their attempt to handle inflation
has given adverse impact on growth.
RBI issued
series of steps to curb rupee decline by tightening liquidity and making dollar
costlier to banks. The RBI raised the Marginal Standing Facility (MSF) rate and
Bank Rate each by 200 basis points to 10.25 percent, capped the amount up to
which banks can borrow or lend under its daily liquidity window and announced a
sale of government securities through an open market operation.
This is
going to give adverse impact on equity price today. Just think when market was
demanding for better liquidity then are pulling out money. It is a disastrous
step. When all global market hit their life time high in 2013, we left behind. This
is the reason. It is the failure of correct policy making. Neither they can
control inflation nor can they boost growth.
Technical
charts are advising caution if Nifty stand below 5980. Till yesterday charts
were saying for a move towards 6100 marks. Now the recent development is giving
reasons for some correction. Trend reversal will not come as long as we are
above 5900 levels. Expect a weak opening.
Strategy
for Nifty July future – SGX JULY NIFTY is
trading with a loss of 55 points right now. It is trading at 5972. We are going
to see gap down. Technical support will be in the zone of 5980-5970 zone. It is
very important that it should not go below this range. If it saves 5960-5970
then we can expect intraday rebound towards 6020 again.
S&P
500
– Current formation is giving a hint that S&P 500 will give a new all-time
high by July month itself or by first week of August.
It is
playing hide and seek game near life time high. For short term it has entered
in heavily overbought zone. In ideal condition, it should have some correction
but I am feeling that correction is coming in the form of time consolidation. This
may give few days of silence before a big storm to take away even 1700 marks technical
support stand at 1660-1655. No correction can begin it below 1655 in any case. Use
dip to buy only.
Regards,
Praveen
Kumar
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